Japan’s Minpaku Market in Data: A Market Where About 30% Withdraw
Introduction
In Japan, minpaku generally refers to lodging businesses that fall under one of the following three legal frameworks.
・The Ryokan Business Act (Simple Lodging): year round operation permitted
・The National Strategic Special Zone Act: year round operation permitted
・The Residential Lodging Business Act: operation permitted for up to 180 days per year
For more on Japan’s rental business structure, please also refer to this article.
Among these, the segment that has expanded most rapidly is minpaku operated under the Residential Lodging Business Act (AKA: Private Lodging Business Act or Minpaku Law). Most of what is recognized overseas as Japan’s Airbnb, short term rental, or minpaku falls into this category. In this article, the term minpaku refers specifically to lodging businesses operated under the Residential Lodging Business Act.
Minpaku under the National Strategic Special Zone Act is not included in the analysis in this article. This is because only eight municipalities nationwide currently permit such operations, and according to the latest data as of March 2026, approximately 94 percent of all such facilities are concentrated in Osaka City. In addition, there are no available statistical data on closure rates or number of guests for this category.
Although minpaku is subject to a limit of 180 service days per year, the market has continued to grow since the Residential Lodging Business Act came into effect in 2018, due to the relatively low barrier to entry and the flexibility of location. The increase in inbound tourism, the weak yen, and growing awareness of inexpensive vacant houses have also contributed to strong interest from overseas investors.
Searches for information such as “Akiya Minpaku how to start,” “Airbnb Japan occupancy rate,” “minpaku investment yield,” and “foreigners minpaku procedure” have also been increasing.
Information available overseas about Japan’s minpaku market and minpaku business has become more realistic in recent years, in line with the tightening of regulations. It is no longer dominated only by the overly optimistic narratives that were common in the past. Even so, overseas investors continue to enter the market based on image driven assumptions and without a realistic strategy.
For example, the following misunderstandings are commonly seen among overseas investors.
・Japan’s minpaku market is large and demand is high, so it represents a good business opportunity.
・Occupancy rates and revenue can be predicted using data sources such as AirDNA.
・Purchasing a property near a tourist destination will lead to success.
・Buying inexpensive real estate in Japan and operating a minpaku allows for low initial investment and high yields.
In reality, Japan’s minpaku market accounts for only a very small share of the country’s overall accommodation market. Moreover, during the most recent six month period, approximately 33 percent of operators withdrew from the market, indicating that it is a highly challenging environment.
Operating a minpaku in Japan is not a simple business that can succeed without strategy. It is not a business that succeeds merely by purchasing inexpensive vacant houses to reduce initial investment or by choosing a location near tourist destinations. It requires proper data collection and analysis, careful evaluation of market demand and target customers, and clear differentiation based on a well developed strategy.
For a broader examination of the minpaku and rental markets from a business perspective, please refer to this article.
In this article, I analyze the realities of Japan’s minpaku market based on official government statistics.
Government Statistics on Japan’s Accommodation Market and the Minpaku Market
First, let us examine the data on Japan’s accommodation market and the minpaku market based on official government statistics.
Note: There is a one month difference between the government reporting periods for total accommodation guests and for minpaku guests under the Residential Lodging Business Act.
Total accommodation guests in Japan (January–December 2025)
・Total guest nights: approximately 653.48 million
・Japanese guest nights: approximately 475.61 million (about 73% of the total)
・Foreign guest nights (inbound): approximately 177.87 million (about 27% of the total)
Minpaku guest nights (February 2025–January 2026)
・Total guest nights: approximately 3.254 million
・Japanese guest nights: approximately 1.375 million (about 42%)
・Foreign guest nights: approximately 1.879 million (about 58%)
From these data, the following can be observed.
Minpaku guest nights account for approximately 0.5% of total accommodation guest nights.
Japanese minpaku guest nights account for approximately 0.3% of total accommodation guest nights.
Inbound minpaku guest nights account for approximately 1.1% of total accommodation guest nights.
These figures show that the minpaku market represents only a very small portion of Japan’s accommodation market, which differs significantly from the image of a “large market.”
As additional context, the regional breakdown of inbound visitors is as follows.
1st: East Asia – 41.8%
2nd: North America – 16.1%
3rd: Southeast Asia – 14.2%
4th: Europe – 11.9%
5th: Australia – 5.1%
Other regions (including South Asia): 10.9%
Closure Rates: A Key Indicator
Another important dataset is the closure rate.
Statistics related to minpaku are published every two months as cumulative totals. By comparing these figures, it is possible to calculate the number of new registrations, the number of closures, and the resulting closure rate for each year.
Annual Registrations and Closure Rates (Past Three Years)
• Feb 2023 – Jan 2024: 27.2%
• Feb 2024 – Jan 2025: 25.3%
• Feb 2025 – Jan 2026: 29.0%
In the most recent six month period, the closure rate was approximately 33%. According to data released in March 2026 (covering December 2025 through January 2026), the cumulative closure rate to date has reached approximately 35.7%.
Closure rates also vary by region. In cities such as Osaka and Sapporo, closure rates exceed 50%, while in Kyoto, where regulations are stricter, the closure rate is approximately 30%.
According to data from the Ministry of Health, Labour and Welfare, the annual closure rate for accommodation facilities operating under the Ryokan Business Act, including hotels, ryokan, and simple lodging (minshuku), is approximately 3%.
Compared with this figure, the closure rate for minpaku operating under the Residential Lodging Business Act (AKA: Private Lodging Business Act or Minpaku Law) is extremely high.
Sources
・Japan National Tourism Organization (JNTO), Visitor Statistics to Japan, annual data for 2025
・Japan Tourism Agency, Accommodation Travel Statistics Survey, linked data
・Ministry of Land, Infrastructure, Transport and Tourism, Minpaku Portal Site, Status of Enforcement of the Residential Lodging Business Act
・Ministry of Health, Labour and Welfare, Report on Public Health Administration and Services, FY2024 (latest data as of March 2026)
Occupancy Rates
Occupancy rates are frequently cited in many websites and information sources. However, occupancy is only one part of the data and represents a result rather than a starting point.
Because occupancy is a result, business development that ignores the processes and strategies that lead to that outcome should be avoided.
With that in mind, when referring to occupancy rates for minpaku in Japan, the following points should be considered.
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Japan’s minpaku market includes not only properties operated purely for investment purposes, but also operations that utilize vacant houses or host style operations where part of a residence is used. In such cases, maximizing profit is not necessarily the objective. Even if occupancy rates are low, operations that do not prioritize profitability are less likely to be closed.
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Data frequently referenced from AirDNA does not include data from major domestic booking platforms that hold a large share of Japan’s accommodation reservation market, such as Rakuten Travel, Jalan, and Ikyu.
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Minpaku listings on Airbnb that appear in AirDNA data also include properties operated under the Ryokan Business Act or the National Strategic Special Zone Act, both of which allow year round operation.
The Reality of the Minpaku Market and Changes Among Minpaku Owners in Japan
The data presented so far shows that while the barrier to entry for minpaku in Japan is relatively low, the barrier to sustaining it as a business is extremely high.
Most of the demand within Japan’s overall accommodation market is captured by hotels. In popular areas and tourist destinations, where hotels and ryokan operate as professional competitors, price competition has become increasingly intense.
In recent years, the practical challenges of operating minpaku have become more widely recognized within Japan. Realistic perspectives are increasingly shared through Japanese online articles, seminars for minpaku operators, and communities formed by property owners. Even so, many people still purchase properties and enter the market without a clear strategy, and cases of withdrawal continue.
In response, various efforts are now being made by minpaku owners in Japan. These include hybrid operations that combine minpaku with monthly rentals in order to maximize profitability within legal frameworks, as well as the development of distinctive concepts to achieve differentiation. Some owners have also shifted their business models by obtaining licenses under the Ryokan Business Act, allowing them to operate year round.
As a result, the earlier perception that Japan’s minpaku market was an easy business to start, capable of generating high yields with minimal effort, is gradually disappearing.
Summary
Minpaku operated under the Residential Lodging Business Act in Japan is not a market in which revenue naturally emerges simply by creating accommodation in tourist areas.
As the data showing that about 30 percent of operators withdraw demonstrates, it is instead a highly competitive market in which survival itself is challenging, and more strategic operations are required.
The market also contains elements that do not appear in statistical data, such as culture, expectations regarding service, and relationships with local communities. In Japan in particular, factors such as the following have a significant influence on rental businesses, including minpaku.
・Accommodation culture (the ryokan tradition)
・High expectations for service quality
・Coexistence with local communities
・Differentiation
These factors do not appear in numerical data, but in practice they are extremely important.
Because these cultural norms, expectations, and shared understandings already form the foundation of the market, Japanese minpaku and rental operators who continue to develop strategies and refine their operations within this context represent strong competitors for overseas investors. Simply assuming that operating a minpaku will automatically generate revenue through inbound tourism is unlikely to succeed in this market.
Both year round operations under the Ryokan Business Act (Simple Lodging) and operations limited to 180 days per year under the Residential Lodging Business Act fall within the broad category of “minpaku.” For this reason, strategic planning from the perspective of a minpaku business is necessary from the very beginning.
To survive and generate revenue in Japan’s minpaku and rental markets, it is essential to develop a realistic strategy based on market analysis, target definition, cultural expectations, and differentiation.
Through my services, I provide various forms of support for overseas clients who wish to purchase and utilize real estate in Japan. From the stage of strategic planning for a real estate project, I assist with research, analysis, consulting, and advice, supporting areas that cannot be covered by English language assistance alone. For more details, please refer to the Services & Pricing and Liaison pages.